As the 2022 core earnings outlook is uninspiring, we therefore see no obvious catalyst for the share price. Nevertheless, its cheap valuation—trades at a YE22 PBV of only 0.6x (1.8SD below its long-term mean of 1.1x)—should lend some support for the share price. Over the long-run, the acquisition of Allnex will be PTTGC’s first step to transforming its portfolio into greater specialty, enhancing its profitability and long-term earnings profile. Our HOLD rating stands.
In line with estimates
PTTGC posted a 2Q22 net profit of Bt1,388m, down 94% YoY and 69% QoQ. Stripping out extra items (mainly gain on inventories, losses on FX and commodity hedging), core earnings would be Bt15,341m, up 44% YoY and 135% QoQ. The result was in line with our estimate and that of the consensus.